"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand," Ford Chief Financial Officer Lewis Booth said.

"But there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions."

While the American carmaker does not intend to retain a stake in Volvo, it will continue to work with the Swedish manufacturer on model development, technology and component sharing.

The sale is expected to take some time, with much of Volvo's processes tied into projects across Ford's manufacturing, including much of the American carmaker's safety systems - an area Volvo has excelled in.

Geely has said that it will not seek to make extensive changes to Volvo's management, allowing the Gothenburg-based carmaker to manage itself autonomously but giving it greater access to Chinese manufacturing and markets.

Volvo was set to launch its all new S60 sedan in Europe later this year after a Frankfurt Motor Show debut. Missing out on Frankfurt, a Los Angeles, Detroit or Geneva unveiling in 2010 now appears likely.

Drawing much of its inspiration from last year’s S60 Concept, the new car’s platform and bodywork is understood to have been signed off, but much work reportedly remains to be done on the S60’s mechanical package.